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Providing Financial Services

When Congress established the Federal Reserve, it charged the Fed with the critical task of providing a safe and efficient method of transferring funds throughout the country's banking system. Reserve Banks and their branches carry out this mission, offering financial services to all financial institutions in the United States, regardless of size or location.

Essentially, a Reserve Bank serves as a bankers' bank, offering a wide variety of financial services. It distributes currency and coin, processes checks and offers electronic forms of payment.

Traditional Forms of Payment

Regional Reserve Banks are responsible for meeting the public demand for currency and coin within their districts. Sometimes people want to hold more of their assets in cash (currency and coin).

Besides providing currency and coin, Reserve Banks process commercial checks. Over the past decade, the Fed has led the industry's push to replace paper forms of payment, such as checks, with electronic forms of payment that offer lower risk and higher efficiency. The Fed now transmits electronic images of checks, as well as allowing electronic deposits and payments.

In 2014, the Fed processed approximately 6.6 billion check transactions. In the near future, the Fed anticipates that at least 95 percent of these will be electronic transactions.

Do you or your family use any of the following? Select all that apply.

A. Direct deposit of your paycheck

B. Electronic bill payment

C. Receiving insurance payments

D. Receiving Social Security payments

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The Fed as a Fiscal Agent

In addition to serving as the bankers' bank, the Federal Reserve System acts as the bank for the U.S. government. Federal Reserve banks maintain accounts for the U.S. Treasury; process government checks, postal money orders and U.S. savings bonds; and collect federal tax deposits. When the Treasury offers new issues of marketable securities to the public, certain Reserve banks provide information about the issues, process orders from customers, collect payments and credit the Treasury's account for the proceeds.

The Fed and the U.S. Treasury process and deliver these services electronically.